Republican leaders' want to deliver their proposed changes to the tax code to President Donald Trump in December 2017, the effects of which may alter the value of homeownership and renting.
According to Capital Economics' data, the average homeowner won't be worse off, based on available details on the legislation. The study's projections say scaling back of deductions will raise the costs of owning by 30 percent over 10 years. However, as CBS News reports, Capital Economics concludes that the itemizing homeowners' overall tax reduction might offset that. Furthermore, even more homeowners will opt for the fatter standard deduction, which would put them ahead of renters.
The key factor in the Republican plan that affects the rent-versus-buy calculus is the more lavish standard deduction, which many homeowners prefer instead of itemizing deductions. Under the standard deduction, you can't write off housing-related costs like property levies or mortgage interest. The GOP legislation doubles the standard deduction amount, currently set at $6,350 for single filers and $12,700 for couples.
